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By Yinka Adegoke and Eric Auchard
NEW YORK/SAN FRANCISCO May 14 Comcast Corp
(CMCSA.O) has agreed to acquire pioneering Web start-up Plaxo
Inc, which was first to turn address books into social networks
and laid the foundation for Friendster and Facebook.
Terms were not disclosed. But a source close to the deal
said Comcast, the top U.S. cable TV company and No. 2 broadband
Internet supplier, is paying from $145 million to $175 million,
based on meeting performance targets in the next few years.
Plaxo is famous in Silicon Valley for being early to see a
business opportunity in users' e-mail address books, but only
belatedly joining the social network craze that followed.
Comcast will use Plaxo to offer social network links across
Comcast-connected devices from TVs to digital video recorders
to, eventually, wireless devices, thanks to a new partnership
with Sprint (S.N), Clearwire CLWR.O and Google (GOOG.O).
Plaxo joins the fast-growing Comcast unit that includes
Comcast.net, video entertainment site Fancast, movie site
Fandango and video publishing company thePlatform.
"Every social network is better the more end points you can
connect with," said Sam Schwartz, executive vice president of
Comcast Interactive Media. "Plaxo will offer users the ability
to share with friends on all Comcast screens going forward."
To foster loyalty, Comcast is seeking ways to connect its
24 million users across its TV, phone and Internet platforms.
It has worked with Plaxo for a year on integrating its e-mail
and voicemail via a service called SmartZone for Comcast's 14
million-plus high-speed Internet subscribers and more than 4
million digital phone subscribers.
Plaxo Chief Executive Ben Golub said joining Comcast would
bring the virtues of social networks not just to existing Web
users but to television viewers, who might decide what shows to
watch based on what their friends on Plaxo recommend.
"We intend to deliver on a vision of making "social media"
a natural part of the lives of regular people, not just
early-adopters," Golub said.
CALL IT A COMEBACK
Plaxo was founded in 2001 by two Stanford engineering
students, Todd Masonis and Cameron Ring, and Napster co-founder
Sean Parker, who was pushed out in 2004 by Plaxo's financial
backers, only to become the founding president of Facebook.
Plaxo kept users in touch by automatically sharing data
between their address books. But it irritated its fanatical
early users with notifications whenever friends updated details
-- giving Plaxo a reputation as an accidental spammer.
In the last three years, Plaxo made a comeback by focusing
on partnerships with big Internet companies to help synchronize
address books and calendars with other Internet services.
Besides Comcast, it works with Microsoft (MSFT.O) Outlook,
Google and Yahoo (YHOO.O) services, Apple (AAPL.O) Macintosh
computers, Mozilla Thunderbird e-mail and many mobile phones.
"Being first, the pioneers sometimes get the arrows," said
Venky Ganesan, a managing director of Globespan Capital
Partners and a member of Plaxo's board of directors since 2003.
"I think of Plaxo as a great redemption story."
The company changed course a year ago to introduce its own
full-scale social network akin to Facebook. Rather than linking
address books, Plaxo Pulse links users via shared interests
based on what they write or the photos and video they share.
Plaxo was once a lone voice for opening up social networks
so users could share data from site to site, assuming they had
permission. Google, MySpace and others have since followed.
"We went from being derided by Internet users to becoming
the champion of what the Internet community wants in terms of
openness and data portability between sites," Ganesan said.
The company now counts 20 million members of the Plaxo
network, up from 5 million three years ago. About a third of
those members came through a partnership with AOL.
Plaxo says it has 30 million more potential accounts from
Comcast, which offers online address books as part of its Web
mail service. Plaxo Pulse has signed up "several million users"
in the past year.
The company had early funding from Sequoia Capital's Mike
Moritz and investor Ram Shriram. Over the years, Plaxo took in
a total of about $28 million in venture capital funding from
Sequoia, Globespan, Cisco (CSCO.O) and DAG Ventures.
(Additional reporting by Anupreeta Das in Chicago; Editing by